SUNFLAG IRON & STEEL 2020-21 Annual Report Analysis

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SUNFLAG IRON & STEEL 2020-21 Annual Report Analysis
Mon, 15 Nov

SUNFLAG IRON & STEEL has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

SUNFLAG IRON & STEEL Income Statement Analysis

  • Operating income during the year rose 7.6% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 48.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.4% in FY21 as against 9.7% in FY20.
  • Depreciation charges increased by 51.9% and finance costs decreased by 30.5% YoY, respectively.
  • Other income declined by 2.1% YoY.
  • Net profit for the year grew by 51.5% YoY.
  • Net profit margins during the year grew from 5.2% in FY20 to 7.4% in FY21.

SUNFLAG IRON & STEEL Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 17,581 18,916 7.6%
Other income Rs m 112 110 -2.1%
Total Revenues Rs m 17,693 19,025 7.5%
Gross profit Rs m 1,706 2,533 48.4%
Depreciation Rs m 462 702 51.9%
Interest Rs m 413 287 -30.5%
Profit before tax Rs m 944 1,654 75.2%
Tax Rs m 18 251 1,316.9%
Profit after tax Rs m 926 1,403 51.5%
Gross profit margin % 9.7 13.4
Effective tax rate % 1.9 15.2
Net profit margin % 5.2 7.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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SUNFLAG IRON & STEEL Balance Sheet Analysis

  • The company's current liabilities during FY21 down at Rs 4 billion as compared to Rs 6 billion in FY20, thereby witnessing an decrease of -24.8%.
  • Long-term debt stood at Rs 1 billion as compared to Rs 1 billion during FY20, a growth of 8.3%.
  • Current assets fell 3% and stood at Rs 9 billion, while fixed assets rose 1% and stood at Rs 15 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 24 billion as against Rs 24 billion during FY20, thereby witnessing a fall of 0%.

SUNFLAG IRON & STEEL Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 13,852 15,329 10.7
 
Current Liabilities Rs m 5,928 4,456 -24.8
Long-term Debt Rs m 1,236 1,338 8.3
Total Liabilities Rs m 24,089 23,984 -0.4
 
Current assets Rs m 9,426 9,171 -2.7
Fixed Assets Rs m 14,663 14,813 1.0
Total Assets Rs m 24,089 23,984 -0.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



SUNFLAG IRON & STEEL Cash Flow Statement Analysis

  • SUNFLAG IRON & STEEL's cash flow from operating activities (CFO) during FY21 stood at Rs 2 billion, an improvement of 6.7% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -603 million on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -2 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 122 million from the Rs 46 million net cash flows seen during FY20.

SUNFLAG IRON & STEEL Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 2,091 2,230 6.7%
Cash Flow from Investing Activities Rs m -1,254 -603 -
Cash Flow from Financing Activities Rs m -792 -1,505 -
Net Cash Flow Rs m 46 122 167.4%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for SUNFLAG IRON & STEEL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 7.8, an improvement from the EPS of Rs 5.1 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 79.7, stands at 5.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 6.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 97.6 105.0
TTM Earnings per share Rs 5.1 7.8
Diluted earnings per share Rs 5.1 7.8
Price to Cash Flow x 10.3 6.8
TTM P/E ratio x 5.5 5.5
Price / Book Value ratio x 0.5 0.6
Market Cap Rs m 14,354 14,354
Dividends per share (Unadj.) Rs 0.0 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for SUNFLAG IRON & STEEL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 2.1x during FY21, from 1.6x during FY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 6.8x during FY21, from 3.3x during FY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 9.2% during FY21, from 6.7% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 11.6% during FY21, from 9.0% during FY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 7.0% during FY21, from 5.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 1.6 2.1
Debtors’ Days Days 460 406
Interest coverage x 3.3 6.8
Debt to equity ratio x 0.1 0.1
Return on assets % 5.6 7.0
Return on equity % 6.7 9.2
Return on capital employed % 9.0 11.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



To see how SUNFLAG IRON & STEEL has performed over the last 5 years, please visit here.

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